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Down-payment assistance ban likely

Congress is poised to ban seller-funded, down-payment assistance programs, according to a story in The Washington Post.

Under these programs, nonprofits pay the 3 percent down payment required for Federal Housing Administration loans in exchange for a matching donation from the seller, plus a fee.

Critics say this artificially inflates purchase prices and these loans are more likely to end up in default. Supporters say they’re a good way to get more people into homeownership.

An administration attempt to ban such programs lost in court earlier this year.

The Senate is likely on Saturday to approve a new housing bill that includes a ban on these programs. The already passed House version does not include the ban, but House negotiators have agreed to the Senate’s position, The Post reported.

Note: This is a seattlepi.com reader blog. It is not written or edited by the P-I. The authors are solely responsible for content. E-mail us at newmedia@seattlepi.com if you consider a post inappropriate..